Marcus Spectrum Solutions LLC

Consultant on wireless technology & spectrum policy

Anonymous Prepaid Cellphones in the News - Again

“The complaint, sworn out by Andrew P. Pachtman, an F.B.I. agent assigned to the Joint Terrorism Task Force, says that Mr. Shahzad used a prepaid cellular telephone to contact a Connecticut woman who had placed an online advertisement to sell the vehicle.” -- NY Times, May 4, 2010

Will FCC and Industry Ever Address the Issue?

SpectrumTalk readers may recall that the issue of anonymous prepaid cellphones has been a recurring one. While prepaid operators generally try to obtain user registration information, we have shown that Tracfone gives you the option to “skip this step” and not bother to make up a false name - very convenient to certain demographics. We have also reported that Japan, Greece, and Mexico prohibit anonymous prepaid phones but allow prepaid phones with reasonable documentation. Now let’s add Singapore to the list. During my recent trip there I bought a prepaid SIM for my GSM phone and was subject to a reasonable inquiry of producing my passport so that the name page could be copied.

Prepaid phones are both a profitable business and a useful service in general. But shouldn’t the industry and FCC start asking questions about why anonymous prepaid service is such a good idea? Section 301of the Communications Act requires a license for transmitter use. 47 C.F.R. 22.3(b) says that subscribers can effectively use the operator’s Tittle III license. Should this really apply if the operators have no idea who the subscribers are? Should FCC ask Tracfone how their users could be in compliance with §22.3 if Tracfone has no idea who they are? (A side comment on §22.3: a careful reading shows it is ambiguous whether it applies to all cellular services or just those in Part 22.)

But just banning all prepaid phones is a poor idea because they are especially useful to the lower tiers of society and important for both their safety and to enable access to employment and social services. Any mandatory registration system for prepaid phones has to be flexible enough to balance between legitimate public safety issues and maintaining connectivity for all legitimate users.

But isn’t it time that FCC and industry start a dialogueon reasonable ways to stop the current flood of anonymous prepaid phonesand their impact on crime and terrorism?

The Canadian government funded a study (PDF) on this question back in 2006. A team from Simon Fraser University looked at 24 OECD countries and found that nine of them require mobile operators to collect registration data for prepaid phone users.

"In all cases, the rationale for a prepaid registration requirement was to improve efficiency of law enforcement and national security activities," said the report.